This is a paper on workplace democracy and the corporate governance debate which was prepared for a 1998 conference at the Brookings Institution. For some reason, it was never published.
It is perhaps ironic that Robert Brookings himself in his last published book was a supporter of employee ownership by arguing for Federal incorporation of all sizable companies with interstate commerce where capital would be treated as being hired by the people working in the firm. Here are the quotes:
“The corporation has with us demonstrated itself as the most efficient organization for the production, distribution, and division of wealth, and, as practically all of our corporations are conducting either an interstate or international business, under our constitution it would seem that Congress has the power to require that such corporations should reincorporate under a federal incorporation act; which act, while securing to capital a fair return at a fixed rate of interest and dividends, risk considered, would divide all additional profit or accretions in the form of labor shares between the employees (management and labor) in the ratio of their individual contribution, probably as recorded by their wage or salary compensation.” [Brookings 1932, 17-18]
“This reform would consist largely in the rental of capital by the workers and management, stabilizing a fair rental return for it while leaving the workers and management as their remuneration all the profits.” [Brookings 1932, 73-74]
The book is: Brookings, Robert S. 1932. The Way Forward. New York: MacMillan.
Click here to download paper.